NHI financing impossible in current economic climate

9 January 2016

The National Health Insurance (NHI) will never come into being unless South Africa’s economy grows by 3,5% on average each year.

Taxpayers will have to fork out R256 billion over the next 14 years to finance the NHI as envisaged by the state. This is according to the NHI White Paper’s projected cost figures. However, all projected costs are subject to the economy growing at an annual rate of 3,5%.

“We are nowhere near this type of economic growth in South Africa. The current economic growth in South Africa is erratically jumping between the 0,7% and 1,3% mark for the 2015/2016 financial year. This means that, in effect, the state’s calculations for the financing of the NHI amount to nothing more than speculation on the best-case scenario, when in fact we find ourselves in the worst-case scenario,” said Armand Greyling, Law and Policy Analyst at AfriBusiness.

“The reality facing us all is that the projected R256 billion required to finance the NHI over the next 14 years will in fact not be enough, leaving the debate open as to who will contribute to finance the shortfall when the NHI has come into full effect. The short answer is, inevitably, the taxpayer,” added Greyling.

AfriBusiness aims to monitor the situation surrounding the financing of the NHI and will do everything in its power to ensure that taxpayers will not be blindsided as a result of poor planning and unachievable aspirations by the state.

Statement issued by Armand Greyling, Law and Policy Analyst, AfriBusiness, 8 January 2016